As the UAE’s real estate market continues to expand at a record pace, first-time buyers often find themselves navigating a landscape filled with attractive offers, complex procedures, and hidden pitfalls. In this interview, a leading industry expert, Ben Crompton, Managing Partner, Crompton Partners, breaks down the most common mistakes new buyers make, the red flags to watch out for, and the essential due diligence required to safeguard your investment. From off-plan schemes to mortgage issues, this interview offers practical, experience-backed guidance to help buyers enter the market with confidence and clarity.
Emirates Reporter brings a clear, easy-to-understand guide to help buyers in UAE.
ER- What are the most common mistakes first-time property buyers make when entering the real estate market in the UAE?
BEN- I think the biggest mistake new buyers make in the off-plan market is chasing perceived “deals” – either discounted offers or attractive payment plans. These often come with high or hidden property prices and from less-reputable developers. In the secondary market, it is failing to arrange their finances before they start looking. They sign an MOU, and are then left scrambling around to arrange their mortgage in time for transfer.
ER- How can buyers protect themselves from hidden costs and misleading property listings?
BEN- Costs are easy enough to find out. In the secondary market, they are quite straight forward, and a reputable broker can outline them for you. They shouldn’t be more than 5% on the property cost (2% transfer fees, 2% broker fees and 1% other items). After the introduction of Madhmoun, property listings are better, but still not perfect. We would always suggest one’s home-search starts with getting a referral for a broker before you start researching on the property portals. That broker can then guide you on what is real and what isn’t.
ER- What’s the role of due diligence and verifications before purchasing property in the UAE?
BEN- Conveyancing a property is left up to the broker, so you will need to do your own due diligence. Making sure the title deed is new, for the correct property and has the name of the owner on it is a minimum. We have heard of a buyer purchasing the wrong property when the seller had two in the same building.
ER- What legal or documentation issues should buyers pay close attention to before signing an agreement?
BEN- Buyers should always read the Memorandum of Understanding (MOU) before signing it.
Make sure they know when it comes to…
Deposits:
- Who is giving a deposit, in whose name, and who will hold it?
- When are the deposits forfeited? – delay, breach of agreement etc.
- What exemptions are there? I) doesn’t value 2) mortgage is refused 3) AML missing
Tenancy and payments:
- Is it tenanted? If it is, what will happen to the deposit and rent?
- Is the buyer looking to move in? If so, does the seller need to give notice to vacate?
- Are the service charges refunded pro-rata?
Finance/Mortgages:
- Does either side have finance? If they do, then the MOU term should be 45-60 days.
- Is it a cash buyer and financed seller? How is this dealt with?
- Is there a prohibition on 1) selling 2) renting or 3) changing the rental terms?
Miscellaneous:
- Are the fixtures and fittings dealt with?
- What will happen to the keys and access cards?
- Which law is it governed by?
ER- What about verifying real estate agents, advisors, or developers?
BEN- All real estate agents, their companies, the developer, and the projects should be found in the Dari App in the “Directory”. If they aren’t in there, they aren’t licensed.
ER- How can one avoid errors that end up being expensive or time-consuming?
BEN- Use an advisor that you trust. It is much better to ask your friends or colleagues for a real estate agent they have used, or who comes recommended, than hoping you get a good one based on pretty pictures on the portals.
ER- How do alluring off-plan schemes compare to reality? Possession promises versus reality?
BEN- Developer reputation is massive in the market, and that is problematic with so many new entrants taking advantage of the positive sentiment and surplus of buyers.
They will make big promises and only some of them will back it up. People recommend government-backed developers, but there is no substitute for experience.
If a developer has handed something over, go and see it. It isn’t a guarantee, but it will give you an idea of what to expect. If they haven’t handed anything over, then look for professionalism over glitz and glamour. Their sales staff should reflect their ethos too.
